Topic: Trusts
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Two joint deposit account customers came in with a trust document and said that their attorney told them to add all trust funds to the joint deposit account. Is that a good idea?
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It may be possible to combine trust funds with the deposit account, if the ownership is the same for all funds, but it may not be advisable. If the only beneficiaries of the trust are the two customers themselves, then they would be considered to be joint owners of the trust funds. See 12 CFR…
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How should we be titling trust accounts? Most of our trust accounts include the name of the trustee in the account title, but some do not.
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Other than the IRS requirements for name controls, we are not aware of any legal restrictions on the titling of trust accounts. The IRS has stated that “[t]he name control for a trust or fiduciary account is developed from the name of the person in whose name the trust or fiduciary account was established. For…
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Do you know of any upcoming changes that will require self-granted trusts to have an EIN rather than using the grantor’s SSN?
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We are not aware of any recent changes to the rules governing Employer Identification Numbers (EINs) for grantor trusts. Whether you need to obtain an EIN for a grantor trust depends on how the trust’s tax return is filed. The instructions for the estate tax return, Form 1041, state that every trust that is required…
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Can the beneficiary of a payable on death (POD) account be a trust?
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Yes, a trust can be the beneficiary of a payable on death account. The Illinois Trust and Payable on Death Accounts Act was amended in 2010 to define the term “beneficiary.” Public Act 96-1151. As defined in the act, the term “beneficiary” includes a trust, among other entities. 205 ILCS 625/2.
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We have a customer that wants to open a d/b/a account that will be held in a grantor trust. Is this permissible, and if so, how should we title the account?
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A trust can own an account that contains a “doing business as” name. Under the Illinois Trusts and Trustees Act, a trustee is permitted to continue and manage a business. See 760 ILCS 5/4.23. In this situation, the trust would be a sole proprietorship doing business under an assumed name, so the Illinois Assumed Name…
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When we open a payable on death (POD) account, should the account’s title indicate that it is a POD account?
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Under the Illinois Trust and Payable on Death Accounts Act, a POD account is formed when the person(s) opening or holding the account sign an agreement with the institution providing that on the death of the last surviving person designated as a holder of the account, the account will be paid to or held by…